## Facts

- The Federal Trade Commission (FTC) initiated a trade regulation rulemaking addressing children’s television advertising, including advertising of sugared products and related health concerns.
- The Association of National Advertisers, Inc. (ANA) and other advertising-industry plaintiffs challenged FTC Chairman Michael Pertschuk’s participation in the rulemaking.
- Plaintiffs alleged that Pertschuk made public statements indicating he had already decided that children’s advertising was unfair, exploitative, and harmful, and that he therefore could not fairly consider the rulemaking record.
- Plaintiffs sued in federal district court seeking to enjoin Pertschuk from participating and relied on an adjudicatory disqualification standard that looks to whether a disinterested observer would conclude the decisionmaker prejudged facts and law.
- The district court applied that adjudicatory standard and ordered Pertschuk disqualified from the rulemaking.
- The FTC appealed to the U.S. Court of Appeals for the D.C. Circuit.

## Issues

1. Whether an adjudicatory prejudgment standard for disqualification applies to FTC trade regulation rulemaking.
2. What showing is required to disqualify an agency decisionmaker in legislative-type rulemaking based on prior public statements.
3. Whether Pertschuk’s statements demonstrated an unalterably closed mind on matters critical to the children’s advertising rulemaking.

## Decision

- The D.C. Circuit reversed the district court’s order disqualifying Pertschuk.
- The court held that the adjudicatory prejudgment test does not control disqualification in FTC rulemaking; a more deferential standard applies.
- The court adopted a rulemaking standard requiring clear and convincing proof that the decisionmaker has an unalterably closed mind on matters critical to the proceeding.
- Applying that standard, the court concluded Pertschuk’s remarks reflected strong policy views and concern, but not a refusal to consider evidence and argument in the rulemaking record.
- The court noted that independent agencies warned that applying adjudicatory-style neutrality to rulemaking would chill public discussion and impair agency leadership functions.
- Separate writings included a concurrence addressing the interaction of Magnuson–Moss procedures with administrative-law concepts and a partial dissent expressing greater concern about the effect of Pertschuk’s statements.

## Legal Principles

- Disqualification standards differ between adjudication and rulemaking: adjudication demands judge-like neutrality regarding adjudicative facts, while rulemaking permits policymakers to hold and express policy views.
- In legislative-type rulemaking, a decisionmaker is disqualified only upon a clear and convincing showing of an unalterably closed mind on issues central to the rulemaking outcome.
- Prior public statements advocating stronger regulation or expressing concern about potential harms generally do not establish disqualifying bias absent proof the official will not fairly consider the administrative record.
- Hybrid procedural safeguards in FTC rulemaking (including enhanced record development and opportunities for participation) do not convert rulemaking into adjudication for purposes of applying adjudicatory prejudgment doctrines.

## Conclusion

The court held that agency heads may participate in rulemaking despite prior public advocacy unless challengers prove, by clear and convincing evidence, that the official’s mind is unalterably closed on critical issues; Pertschuk’s statements did not meet that standard, so his disqualification was improper.


Ass'n of Nat'l Advertisers, Inc. v. F.T.C., 627 F.2d 1151 (D.C. Cir. 1979)